Digging out of Trump’s ethanol dilemma

Source: By RYAN MCCRIMMON, Politico • Posted: Thursday, September 5, 2019

After campaigning as a champion of ethanol, Trump is struggling to pacify corn growers and biofuel producers angered by his approval last month of 31 waivers the EPA granted to small oil refiners. But it’s unclear if a compromise the White House is now considering will be enough to placate farmers, Pro Energy’s Eric Wolff reported last week.

Farm fallout: The action last month sparked a backlash from producers who say the exemptions undermine demand for ethanol, exacerbating economic challenges in agriculture including low crop prices and the trade war with China. The National Corn Growers Association on Friday said Trump’s ethanol moves have cost 2,700 rural jobs and affected demand for 300 million bushels of corn due to lower ethanol production and plant closures.

“NCGA has no confidence in the volumes EPA proposes for 2020,” Lynn Chrisp, the group’s president, wrote in comments submitted to the EPA. “These refinery waivers have significantly outpaced annual increases in [Renewable Fuel Standard] volume requirements, taking RFS volume requirements backward.”

The president’s hands-on approach to the highly technical program is unusual, and it reflects the importance of the competing industries — oil and agriculture — as central pieces of Trump’s political base. But finding a compromise has proved elusive.

Trump last week promised a “giant package” of changes, claiming that “the farmers are going to be so happy when they see what we are doing for ethanol.” Agriculture Secretary Sonny Perdue, EPA Administrator Andrew Wheeler and White House aides are negotiating details of a plan to boost both corn ethanol and soy-based biodiesel by raising blending requirements for next year.

The plan under consideration would add about 875 million gallons to refiners’ obligations, but that accounts for just a third of the volume affected by the EPA waivers.

On your radar: The administration is soon expected to roll out details of the final package.